Airbus A3XX case study Group E10‚ MBA 2011 Airbus A3XX case study‚ Group E10 Airbus objectives Both Airbus and Boeing‚ as well as industry experts expected worldwide passenger traffic to grow at an average annual growth rate of 4.8-4.9% for the next 20 years (up until 2019). Given that the traffic was expected to almost triple in volume‚ both manufacturers expected a significant increase in aircraft sales‚ although their views on the market structure were different. Airbus expected hub-to-hub
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INTRODUCTION Until 1980‚ the American manufacturers in the aerospace industry enjoyed an exclusive control of the aerospace industry despite the entry of the European-based Airbus industry in the late 1960s. The American manufacturers dominated the industry at the time that it was difficult for the European manufacturers to compete‚ but just like all industries resources and capabilities are fundamental building blocks for a firm’s strategy. Some business organizations especially those in the airline
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large aircraft (VLA) which is forecasted to be around 1550 planes including passenger jumbo jets and freight carriers in the next 20 year period provides an opportunity for Airbus to capture this market with its A3XX. The cash flow and commercial viability is analysed below. Discount Rate: 6% + 0.84*6 = 11.04% Growth Rate: 2% = inflation Tax Rate = 38% Year Units Sold Free Cash Flow PV of Cash Flow 2001 0 $ -682.00 $ -682.00 2002 0 $ -1‚457.00 $ -1‚312.14 2003 0 $ -1‚525.00 $ -1‚236.83 2004
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The idea of a jumbo airliner being capable of seating over 500 people almost seemed unreal. That is‚ until Airbus came along. This idea for the jumbo plane started as a joint venture with Boeing‚ but after it started Boeing backed out because of high costs and speculation of demand. Airbus pushed along and in 1999‚ they completed to rough draft of this plane. The problem with this plane that was obvious was first the overall cost of the plane. It was estimated to cost about 13 billion to launch.
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could pose as a strategic opportunity for Airbus which it could utilize to build a competitive advantage combined with its technological resources and capabilities. However‚ its assumptions of a drastic increase in VLAs demanded in next 20 years along with its ability to satisfy most of this are too optimistic. Provided that these assumptions (inc. breakeven points‚ initial order requirements) are normalized‚ A3XX is a project worthy to pursue for Airbus in order to exploit a neglected spot on the
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In the Airbus case we are faced with a capital budgeting decision. It is the planning process used to determine whether a firm’s long term investments such as new machinery‚ replacement machinery‚ new plants‚ new products‚ and research development projects are worth pursuing. It is budget for major capital‚ or investment‚ expenditures. Capital budgeting decisions are crucial to a firm’s success for several reasons. First‚ capital expenditures typically require large outlays of funds. Second‚ firms
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Introduction Background of Airbus Corporation Airbus began as a consortium of aerospace manufacturers. Consolidation of European defence and aerospace companies around the turn of the century allowed the establishment of a simplified joint stock company in 2001‚ owned by EADS (80%) and BAE Systems (20%). After a protracted sales process BAE sold its shareholding to EADS on 13 October 2006. Airbus employs around 57‚000 people at sixteen sites in four European Union countries: Germany‚ France‚ the
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2/7/2014 Airbus case study Airbus case study Introduction (Facts). Airbus is the company that deals with the manufacturing of aircrafts in the market. It was formally established in 1970 as a European consortium. It has a head office in Toulouse; France operates out of over 160 international locations. It include 16 main development and manufacturing sites in France‚ UK‚ Germany & Spain and three wholly owned subsidiaries in China‚ Japan and North America. The Airbus benefits from a
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Case Study: Airbus A3XX 1. Airbus considers building the A3XX a great opportunity to help the company enters VLA market‚ in order to increase competitive ability and make profits. There are three main perspectives to support this project: (1). A3XXX is the solution to meet increasing demand; As for increasing the according carrying capacity‚ Airbus believes that it is more realistic to develop “Very Large Aircraft” rather than to increase aircrafts frequency or to enlarge airport size. Industry
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Technical Follow-Up PAGE 1/2 TFU REF : 21.60.00.007 OWNER/EXT : J.BRAUD Tel : +33 561180038 E-Mail : jerome.braud@airbus.com Issue with actuator PN 9069 fitted on ECS electro-actuated valves A/C Affected : A318‚ A319‚ A320‚ A321‚ A330‚ A340‚ A340-500‚ A340-600 Engine Affected : FAIR-ISP Item : 10.0154 TFU STATUS : OPEN TFU ISSUE DATE TFU FIRST ISSUE DATE TFU NEXT ISSUE DATE ISSUE NB : : : : JUN 2013 AUG 2011 AUG 2013 08 DESCRIPTION : Operators are reporting an increase number of removals
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